First time property investors – where to start?

Property investment is one of the most popular ways in which Australians choose to grow their wealth.

The combination of a passive rental income with growing equity in an appreciating asset is certainly an attractive one, particularly as with property investment loans you can purchase a piece of investment real estate at comparatively high leverage.

For first time investors however, it may be daunting to take the first step and enter the arena. How do you know where to start and how to proceed?

Get to know economic indicators

Investment real estate is a market and it has its ups and downs. Unless you are a property-savant it can be hard to accurately predict the exact movements of such a complex set of relationships.

Yet that doesn't mean you can't make educated guesses, and the quality of those guesses will depend on how much you educate yourself about current market conditions.

There are lots of different statistics which can help you form a picture of the market and influence where and when may be best to buy.

Housing market activity can be gauged by looking at auction clearance rates, loan commitments and dwelling starts.

Similarly, an overview of current rental activity can be gained by studying vacancy rates, median rent prices and investment loan commitments.

Learn how to get maximum benefit

If you don't know what negative gearing is, go and find out right now.

Property taxes and other legislative requirements are not the same for investors as they are for people buying property to live in themselves.

That means you will have different obligations, but also different opportunities – so be sure to clue yourself up.

Talk to an investment loan expert

A mortgage advisor can structure a personalised investment finance deal which gives you the funds you need to start your property portfolio.

They can also provide you with helpful tax advice for investors and talk you through the insurance covers you will require as the new owner of investment property.